A Production Function of the Form Q = 150L

question 22

Multiple Choice

A production function of the form Q = 150L^.75 K^.50 exhibits ______ in the long run.

• A)increasing returns to scale
• B)decreasing returns to scale
• C)constant returns to scale
• D)diminishing returns to the variable input

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Definitions:

Installations

Fixed assets or equipment necessary for an organization or business to operate, sometimes referring to large machinery or technical setups.

Steel Ingots

Large blocks of steel that have been forged or cast and are used as raw material for further processing and shaping into various steel products.

Sheet Metal

Thin, flat pieces of metal formed into sheets that are used in various applications including manufacturing and construction.

Supplies

Materials, tools, or other items required for the production of goods or the provision of services.